The new Apple TV delivers 1080p video along with the features and revamped user interface of "Software Update 5," a free update to existing second generation Apple TV users.

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What's new in the third generation Apple TV

In terms of features, the latest Apple TV is really only different from the previous iOS based $99 model it replaces in that it can handle 1080p video and that it has an additional wireless antenna for improved WiFi reception that can support faster access to 802.11n wireless networks.

In order to play 1080p video, Apple replaced the previous model's A4 chip with a single-core A5. This gives it computational power somewhere between A4 class devices (including the original Apple TV, iPad and iPhone 4) and last year's dual core A5 products (iPad 2 and iPhone 4S).

This is the opposite direction Apple took with the new iPad's A5X, which took the basic design of the A5 and added twice as many graphics cores. Like the new A5X iPad, the single core A5 variant in Apple TV is given twice as much system RAM as the previous generation.

While the second generation Apple TV had 256MB, the newest model has 512MB, giving the system more breathing room for pushing around larger (and better quality) videos. Additional detail on the new Apple TV's hardware capabilities is presented on the final page of this review, after an overview of its new software features.

Apple TV Software 5.0

While the third generation Apple TV has added horsepower to handle higher quality 1080p video, its feature set is available to the millions of existing iOS Apple TV users via a free version 5 software update, offering a refreshed user interface; iCloud integration that enables users to access previous movie, TV and music purchases directly from iTunes; new photo screen saver formats for your photos or the included professional photography of National Geographic and on-device signup and login for services ranging from Netflix to Flickr.

The new user interface presents five main navigation targets: Movies, TV Shows, Music, Computers and Settings.

Scroll down, and the system presents 13 additional services to navigate, in a new app-like button interface similar to Nintendo Wii channels.

Previous Apple TV software was more menu-centric. The new user interface makes it easier to start toward the direction you want, and makes a variety of services that were once hidden within menu options more visible.